Study Guide for Foundations of Finance : The Logic and Practice of Financial Management

Summary

Accessible to non-finance and finance professionals alike, this book explores 10 easy-to-understand core principles (axioms) that drive the practice of corporate finance. Eliminating non-essential material and keeping mathematics to a minimum, it features an intuitive approach that helps readers develop a solid understanding of the logic that drives financerather than concentrating on easily forgotten formulas and calculations which may not neatly fit all the situations encountered in the real world. Features in-the-trenches interviews with business professionals, a refresher on Understanding Financial Statements and Cash Flows, and frequent Financial Management in Practice boxes. The Financial Markets and Interest Rates. Understanding Financial Statements and Cash Flows. Evaluating a Firm's Financial Performance. The Time Value of Money. The Meaning and Measurement of Risk and Return. Valuation and Characteristics of Bonds. Valuation and Characteristics of Stock. Capital-Budgeting Techniques and Practice. Cash Flows and Other Topics in Capital Budgeting. Cost of Capital. Determining the Financing Mix. Dividend Policy and Internal Financing. Financial Forecasting, Planning, and Budgeting. Introduction to Working-Capital Management. Liquid Asset Management. International Business Finance. For anyone involved in Corporate Finance and Financial Management.

Table of Contents

About the Authors

vi

Preface

xvii

Part One The Scope and Environment of Financial Management

1

(132)

An Introduction to the Foundations of Financial Management---The Ties That Bind

3

(28)

The Financial Markets and Interest Rates

31

(40)

Understanding Financial Statements and Cash Flows

71

(32)

Evaluating a Firm's Financial Performance

103

(30)

Part Two Valuation of Financial Assets

133

(114)

The Time Value of Money

135

(32)

The Meaning and Measurement of Risk and Return

167

(32)

Valuation and Characteristics of Bonds

199

(24)

Valuation and Characteristics of Stock

223

(24)

Part Three Investment in Long-Term Assets

247

(98)

Capital-Budgeting Techniques and Practice

249

(30)

Cash Flows and Other Topics in Capital Budgeting

279

(32)

Cost of Capital

311

(34)

Part Four Capital Structure and Dividend Policy

345

(78)

Determining the Financing Mix

347

(46)

Dividend Policy and Internal Financing

393

(30)

Part Five Working Capital Management and International Business Finance